Crafting A Killer Startup Story For Your Fundraising Pitch

Co-Authored with Ryan F. Salerno, Technical Co-Founder at Equity Token.

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Earlier this year, in response to the question “What are the most common mistakes founders make when they start a company?”, Justin Kan, the Founder of Twitch & Atrium, responded with the following:

“Mistake 1: Underestimating the importance of narrative when fundraising:

I firmly believe that investors invest in (and employees join, and journalists write about) compelling stories, and your pitch deck is really just a vehicle for telling the story you want to tell. So, start first with the narrative and build the deck after you have it nailed.”

Finding Your Killer Company Narrative:

You need a killer company narrative for your startup pitch. Wether you are telling your family about your company or speaking with investors while fundraising, how you communicate your company’s narrative matters.

From a pure story perspective, how do you do that? Let’s quickly introduce two frameworks we will be using.

Framework 1: Story of Stories

With this question in mind, I was recently reading a series of new posts called The Story of Us from one of my favorite authors, Tim Urban. In it, he breaks down the specific characteristics required for a normal story to become a story virus. Those characteristics are:

• Simplicity

• Unfalsifiability

• Conviction

• Contagiousness

• Accountability

• Comprehensiveness

Framework 2: Startup Focus

Jonathan Greechan, Co-founder of the Founder Institute, has a presentation on Startup Focus. According to Jon, your startup must do the following:

To arrive at your killer company narrative, you need a startup story that is simple and unfalsifiable, while also fitting the “Solve One Problem for One Customer” framework. 

Here’s an example company narrative if Stripe were to go through this exercise. 

Securely collecting credit and debit card payments is hard for developers. With the Stripe Checkout Product, developers can embed a payment form that costs $0.30 per transaction. 

Your narrative is hiding inside the walls of your company’s brain, it’s a matter of drawing it out. Now let’s outline the steps, including all of the specific techniques used to arrive at a killer company narrative.

Step 1 - Prepare:

Over the course of a few days start brain dumping any and all talking points you currently associate with your company into your notepad.

Schedule a “Narrative Day” with your whole team. Find a conference room and book a day on the calendar with no other meetings, so you can focus on this project.

Buy the following supplies before the meeting and be sure to bring them with you:

• Post-it Super Sticky Wall Easel Pad, 20 x 23 Inches ($30 on Amazon)

• Different Color Sticky Post It Notes ($6 on Amazon)

• Color Coding Stickers ($5 on Amazon)

• Markers

As I mentioned above this process was inspired by Tim Urban’s “Story of Stories” framework. I highly recommend having your team read this post in advance of your company’s narrative revision meeting.

Step 2 - Brainstorm:

Stick up five sheets of the sticky wall easel pads around the room. Going left to right label each of them as follows:

1. Original Company Vision

2. Current Narratives

3. Goals For New The Narrative

4. New Potential Narratives

5. Target Customers

Hand out the sticky post-it notes to your team. If you want, you can give each person their own color so you can later easily see who contributed what ideas. 

Start with the first board “Original Vision” by having each person on your team write down a sentence (small enough to fit on a sticky note) that describes your company’s original vision. Originally, when your company was an idea over beers, what was the initial pie in the sky dream for the vision? 

Each person should write as many as they can think of in a few minutes. After time is up, everyone puts up their stickies on the wall and someone reads them out loud.

Step 3 - Vote & Sort:

Next, use the dot sorting technique. Give each person on the team a bunch of the green and red dot shaped stickers. It is now time to upvote and downvote the Original Vision board to determine which company narratives are resonating with your audience / customers.

Each person should place a green sticker on the ideas they want to upvote as resonating with your audience / customers.

Each person should place a red sticker on the ideas they want to downvote as resonating with your audience / customers.

Now rearrange the post it notes so the ideas with the most upvotes are on top, and the idea’s with the most downvotes are on the bottom!

You now have a clear and glanceable look at what is working and what is not with regard to your original vision for the company.

Step 4 - Repeat For Each Section:

Repeat this process for the remaining boards. Letting every team member contribute ideas and then helping to vote them up/down.

• Current Company Narratives

  • What does the website say right now? If you asked someone else to describe your company back to you, what would they say? Write down an honest depiction of the current narrative. 

• Goals For New The Narrative

  • What do you want to achieve, given this new narrative? Hiring more employees? Signing up more customers? Getting more revenue? Getting more funding? A better brand? Whatever it is, write out all the goals. 

• New Potential Narratives

  • Brainstorm as many new potential narratives as you can think of. At this point there are still no wrong answers, so don’t filter yourself. Let the ideas flow and allow the dot voting take care of bringing the strong ideas to the top.

• Target Customers

  • Who are going to be your initial target customers? Get as specific as possible. E.g. Startup founders running companies from Seed to Series A. 

With the completion of each board, you will see a pattern start to emerge. Granting you a more focused and evolving clarity into how you need to structure your communications going forward.

Step 5 - Forcing Focus:

Remember those frameworks we introduced above. We are now going to apply them as filters to the narratives we just defined.

Sharing two more slides from Founder Institute Co-founder Jonathan Greechan’s presentation around focus for startups:

Put another sheet of the sticky wall easel pad on the wall and add the following to it, with room to write in answers under each:

• One Problem

• One Customer

• One Product

• One Killer Feature

• One Revenue Stream

This template may seem obvious at first but as any founder can attest; the large magnitude of possible product features you can build, conflicting feedback, and more can sometimes feel burdensome. No body wants a bloated startup pitch. This structure is going to help you focus in on your specific startup’s niche.

Step 6 - The Story of Stories:

In Step 5 you defined your Focus, and now in Step 6, make sure your focus fits all of the criteria of being a killer company narrative.

This is where we come back to the Story of Stories. In the post Tim defines few necessary characteristics of a viable story virus:

• Simplicity. The story has to be easily teachable and easily understandable.

• Unfalsifiability. The story can’t be easy to disprove.

• Conviction. For a story to take hold, its hosts can’t be wondering or hypothesizing or vaguely believing—the story needs to be specific and to posit itself as the absolute truth.

• Contagiousness. Next, the story needs to spread. To be spreadable, a story needs to be contagious—something people feel deeply compelled to share and that applies equally to many people.

The story, once believed, needs to be able to drive the behavior of its host. So it should include:

• Incentives. Promises of treats for behaving the right way, promises of electroshocks for behaving the wrong way.

• Accountability. The claim that your behavior will be known by the arbiter of the incentives—even, in some cases, where no one is around to see it.

• Comprehensiveness. The story can dictate what’s true and false, virtuous and immoral, valuable and worthless, important and irrelevant, covering the full spectrum of human belief.

Some great examples of strong story virus include Santa Claus and Catholicism. It is important you have an understanding around these characteristics as we are going to apply them as filters in the next step.

I recommend writing these characteristics down on another sticky wall easel pad so everyone in the room can clearly see the criteria that needs to be met.

Step 7 - Fill In The Blanks:

So we know have all of the following information at our disposal:

• Original Company Vision

  • A understanding of what our company set out to do in the first place.

• Current Narratives

  • What is currently working and not working.

• Goals For New The Narrative

  • How we want to improve the company’s narrative pitch.

• New Potential Narratives

  • The best candidates for our startups’ new story.

• Target Customers

  • Defined segment of target customers.

• Knowledge around what makes a good story in the first place

• A solid template to force focus.

The next step is to fill in the blanks on the Problem, Customer , Product, Killer Feature, Revenue Stream template board.

The key here is to keep your answers for each to only a few carefully chosen words and to ONLY fill in the blanks with words that meet all of the requirements of the story virus.

String each of the answers together to form one sentence! Just like that Stripe example above.

Securely collecting credit and debit card payments is hard (PROBLEM) for developers (CUSTOMER). With the Stripe Checkout Product (PRODUCT), developers can embed a payment form (KILLER FEATURE) that costs $0.30 per transaction (REVENUE MODEL). 

You now have your company’s new narrative!

Step 8 - Go Spread The Gospel

Start pitching your new startup story and see if it is resonating better than before. This process can help immensely when your company is fundraising. If you are like any of the companies I have seen use this process so far, then you should immediately start to see the benefits from this one day team exercise. Remember:

“Genius is the ability to put into effect what is on your mind.”

- F. Scott Fitzgerald

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• How To File 83(b) Election With The IRS

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More on Tim Urban: 

You may know Tim Urban from his famous TED Talk “Inside the mind of a master procrastinator”. On his website, Wait But Why, his articles tend to break down complex topics such as Artificial Intelligence, Elon Musk’s Neuralink, Religion, E-mail, Marriage, and so much more, to very simple explanations. So when Tim didn’t publish anything new for 3 years, many readers wondered what he was possibly working on. The answer was a new series of posts titled “The Story of Us”. If you have read and loved Sapiens by Yuval Noah Harari, then I recommend you check out The Story of Us: Full Series!

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Bryan Janeczko Is Helping Entrepreneurs Gro

Bryan Janeczko

Bryan Janeczko was recently named one of the Top 23 LGBTQ people in Tech, along side other notable figures such as Tim Cook, Peter Thiel, and more. He has built a strong track record for building great businesses including: NuKitchen, a food preparation service that helped people eat healthier. NuKitchen was later sold to Nutrisystem and pioneered the market long before Blue Apron or Plated even existed. 

Now Bryan is the Founder of Gro, an on-demand startup academy. As part of the Loeb.NYC family, a venture studio in the heart of New York City, Bryan is helping founders at all stages. In a new partnership between Tony Robbins and Loeb, they have also launched Nunbelievable Foods, a baked goods company that turns their profits into feeding the homeless.

Bryan grew up in Milwaukee, started a candy selling business in High School where he would at times bribe the teachers with a candy bar in order to sell more candy bars at the beginning of each class to his fellow classmates. It was such a popular business, that he started having distributors, which eventually had the principal pulling the plug on his first entrepreneurial experience. However, that didn’t stop his entrepreneurial spirit! After school, and a summer abroad in England, Bryan decided to make the big move to NY! He had a place to stay for one week and a credit card, and the rest is history! Tune in to hear more of Bryan’s story: 

• Learning resourcefulness early on

• His life changing trip to England

• Starting and selling his company, NuKitchen

• Co-founding Startout

• His time as the Director of Founder Institute New York

• Working with Loeb NYC

• Founding Gro Academy

• Working with Tony Robbins and Nunbelievable Foods

Quote of the Episode:
“Every founder brings their unique set of traits and many of us become entrepreneurs because we may not make it in more traditional jobs…”

Ambition Today Question of the Day™ :
”What advice can you give an entrepreneur at the beginning stages of building their first business?”

The Single Greatest Piece of Advice:
Members of the "A-list" can listen to exclusive A-list bonus clips here! If you are not a member yet be sure to join the Ambition Today A-list!

Links from this episode:

• Gro Academy

• Bryan’s LinkedIn

• Startout

• Loeb NY

• Nunbelievable

• Founder Institute

• We Work

• Audible

Listen to this episode now: 

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The A-List

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If you are already a member of the A-list then you can easily access your bonus content from right here! 

Thank you for listening! 

Thank you so much for listening and applying these useful tips and strategies to your life! If you have a chance, please drop by and leave a review for the show on iTunes by clicking here. Also, who should I interview next? Please let me know on Twitter or in the comments. Do you enjoy this podcast? If so, please leave a short review in the comments below. It keeps me going…

Transcript:

You can find the full transcript of this episode here. 

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Startup News Essentials

At the start of every new cohort of Founder Institute New York I like to share some of my favorite news sources with the new founders. For many founders starting out, consuming the right news from the right sources can really help to plug you into the global startup and tech community.

If the old saying, “You are the average of the five people you spend the most time with.” is true, then one of the incredible advantages of the internet is the fact that you can customize whose opinions and knowledge you decide to spend the most time with.

The below list could easily be hundreds of links, but for the sake of simplicity I am going to focus on the core recommendations of what I read everyday. I am also going to focus mostly on news sources. I might do another post on the topic of specific blogs and which individuals to follow in the future. Feel free to add any more news sources that you love in the comments below and up vote the best ones! 

For Everyone: 

Nuzzel - This is my favorite news source! Nuzzel's algorithm finds trending articles from your personal network. And even better, they make it really easy to see the trending articles in influencer's networks as well.

Techmeme - If you want to know what the whole industry is talking about on any given day, then this is your one stop! The essential tech news of the moment curated by a mix of editors and an excellent algorithm. 

Launch Ticker -  Efficient tech news broken down to the most important three sentence summary of the original article. Really good at extracting the most important, essential, and relevant information from news to save you time. 

Hacker News - Social news website focusing on computer science, tech and entrepreneurship. 

Axios Pro Rata - Dan Primack's daily newsletter breaks news about deals and dealmakers from Wall Street to Sand Hill Road.

Fortune Term Sheet - Fortune's daily newsletter about venture capital deals and dealmakers.

Product Hunt - Because it is one of the most fun sites on the internet! And because Product Hunt is a curation of the best new products, every day. You will almost always leave the site with something new and exciting to check out. 

Angel List - It is quickly becoming the case that if you want to "exist" in the startup world then you need to be active on AngelList. You can find trending companies, make a hire, invest in a syndicate, connect with other founders, and more. They recently acquired Product Hunt too! 

 

For New Yorkers: 

Digital NYC Voices -  Tips and thoughts from the leaders in NYC business and government. 

AVC - The only blog on this list because Fred Wilson's insightful posts have become daily reading. The comments from the community are often just as good as the original content. 

NYC Innovation Collective - A semi-monthly newsletter that is the byproduct of over 70 NYC startup accelerators, incubators, innovation programs coming together to share resources and news! 

Gary's Guide - Weekly collection of all the startup and tech events happening in New York. Gary does an excellent job curating the information each week, and oh by the way he wears a red tie you can advertise on IRL! 

Charlie O'Donnell's Weekly Newsletter - A curated list of NYC innovation community events each Monday morning.

Gothamist - Never miss a NYC meme again. From breaking news on the cronut, to mayoral soda tax scandals, to changes in the subway system, to Banksy's central park popup stand, the Gothamist constantly has you covered! 

2016 Startup Funding Trends With Adeo Ressi

Adeo Ressi at Valley in Berlin 2016

In 2015 it was all the rage to be a "unicorn", a startup company with a billion dollar valuation. Since then the supposed "startup and tech bubble" has popped and the gold rush is over. But what is really happening with the markets? 

Alex Konrad recently gave us some insight on Ambition Today and now today we have a more in-depth explanation of what is happening from Adeo Ressi, the founder of the Founder Institute. Last month Adeo was in Germany for the "Valley in Berlin Summit" and keynoted a talk around the 2016 Startup Funding Trends we are currently seeing. If you are thinking about fundraising, have a startup, or plan on starting your own company you are going to want to watch the keynote below. 

Quit Your Job, Grow Your Startup

Working corporate from 9-5pm and startup business from 5-2am. It is not easy but you will make progress. After all work is work and you are doing something, which is always better then nothing. But, you will be distracted. Your startup business will not have your full attention and for that it will suffer. There is an answer though. Quit your job and focus on your startup. Here are some thoughts on doing just that. 

 

1. You Need to Raise Capital 

Adeo Ressi, CEO of the Founder Institute says “It's important to quit your day job. I recently got an update from a graduate. Their company failed to raise capital and his day job was getting harder, so he had to close his startup. This comes as no surprise, since I have never heard of any startup that was able to raise professional angel money while the Founder was still employed. Furthermore, it's nearly impossible to dedicate the time and mental energy necessary to gain traction in the marketplace for your product while working for another company."

2. Quitting Your Job Is The Next Step to Success

Mohamed Kamal, Co-Founder and Head of Product for Gigturn adds, “Adeo is completely right. I bombed two investors meetings because I had a day job. Here’s the cold truth: Deciding you want to quit is usually just the first move in a long and cerebral chess match you’ll play with yourself. I’ve found that a founder's inability to quit their current day jobs had little to do with the perceived riskiness of their new startups, their financial situation, or general economic conditions. The real barrier for most of us is not external. It’s our own psychology – we:

• Overthink decisions
• Fear eventual failure
• Prioritize near-term, visible rewards over long-range success.

I found myself hesitating in front of an email send button. It was my resignation email which took three hours to write. Sending it was the ultimate mind hack."

3. There's No Such Thing as "Perfect Timing"

“My experience was similar, but with an extra ingredient... when I was about to quit my job my wife was diagnosed with cancer so it was an even harder decision. I talked to one of my advisors and he asked me, ‘When do you think it's the perfect time to start your company? There will always be a problem out there, you just have to choose if you want to do it or not.’ I then talked back to my wife and asked her if she would support me in case I didn’t raise enough money to live for a year and she agreed.

Now she has no cancer, we are about to receive new funds and the business looks promising. If I hadn't taken that decision in that apparently insane moment, none of this would be happening, so I really appreciate her faith in the project and the words from my advisor." - Sebastian Wilson, CEO at Luminux.cl.

4. Minimize Distractions to Reduce Mistakes

Tom Walpole, Co-Founder of Wembli, says “I have a meeting in about 3 hrs today to tell my employer I intend to focus on my startup full time. It’s a mind hack! In our situation, my co-founder happens to be my wife (they say co-founding is a marriage anyway right?!) - arriving at the decision that this is not only best for our business but also our family has definitely been a challenge, but at the same time a good measure of our ability to work as a team (in life and business) as well as an exercise in trust and support for each other.

I've spent the last 18 months developing, collecting user feedback and then developing again. Although that cycle never ends, it has come to a head where we have a refined enough product to start spending serious marketing money to grow it makes sense to us that we should minimize distractions which will hopefully reduce our mistakes and get more for our money.”

5. Part-Time Work May be a Better Option 

“Whilst I was in FI I quit my day job to focus on my startup. It was the right decision. In order to fund day to day living I was just going off savings but I've also been fortunate in picking up some part time consultancy gigs which is a bonus. By consulting to the right companies I've also been exposed to some other contacts including investors so that's good too. Up until the product was available (in my case) the consultancy has worked great. Now that the site is live my work is cut out for me as I hustle away the plan is to focus on Oddswop and fundraising." - Yvonne Lee, Founder of Oddswop.

6. You Fail Faster 

"The thing about having a job is that you don’t have the ability to fail fast. An unemployed founder has the entire day to meet partners and customers but an employed founder only has a few hours per day after work. And that’s assuming that people actually want to talk to you after working hours, instead of spending it with their families. 

An unemployed founder has a fixed amount of money, so that forces the founder to really focus on being cost efficient. An employed founder, however, has a steady monthly salary so naturally it’s harder to focus because that founder can literally afford to do so. That means that what takes an unemployed founder 2 weeks to learn may very well take an employed founder 2 months. Compound that and you may end up spending years of your life on something that doesn’t work." - Elisha Tan, Founder of Learnemy.

7. You have to Constantly Deliver 

According to Goran Candrlic, Co-Founder of Webiny: "We are scaling our product and team by doing consulting jobs. It's easier but it's constantly selling and delivering. So far we're alive and getting our core business up and running day by day."

8. The Devil's Advocate

Ramzi Zahra, Founder of Service List had some counter points to offer though. "I'd agree with the quit your job sooner then later theory however there are a few important matters to factor-in that are often forgotten. We can all agree that without putting the effort in a startup then it is likely that it will fail so you have a few choices: 

1. Do it slow - Work on your start-up part-time/casually whilst keeping your day job. 
2. Do it fast - Quit your day job to work on your startup.

An innate nature in humans is rush, they want results and they want it now. However to make the best decision it will depend on the grad's situation: 

a. Stage of the startup - Early stage work is different than traction, funding, etc.
b. Financial situation - Can the founder afford to live without funding for a while? 

I believe it is vital to factor the two points above to get the answer that is best for each situation. The second point is really critical. I personally quit my job to work on a startup however I soon found myself distracted with having to get some money in the door to pay rent/food/expenses. The startup was not "officially" launched yet and I was no where near raising funding. I chose to do some web development on the side to get by however it took a fair bit of time of my day. So did I really "quit" my day job? Some might argue that I didn't. In summary, Adeo's point is spot on however it cannot be used as a blanket rule and is more geared towards founders that are ready for funding."

The Single Biggest Reason Why Startups Succeed

I was recently watching Charlie Kim, founder and CEO of Next Jump, presenting at the Founder Institute. During his talk he cited a TED talk by Bill Gross titled "The Single Biggest Reason Why Startups Succeed".  I found the talk and enjoyed it so much I thought I would share it. You can find the link to it by clicking here.

Bill wanted to find out what is the single biggest reason startups succeed. He analyzed 200 companies. For each company he looked at the business traits of Funding, Business Model, Idea, Team, and Timing to determine which traits correlated most to its success. The quick synopsis is that the Bill Gross study showed that Timing (42%) is the single most important factor in a why a startup succeeds. Followed by Team (32%), Idea (28%), Business Model (24%), and lastly Funding at (14%).

What do you think? Agree? Disagree? Let me know in the comments below. 

Why You Should Tell Everyone Your Startup Idea

Entrepreneurship is hard. Really hard. But with countless tales of how entrepreneurs made it big with almost nothing, it's easy for a budding founder to jump into the startup world full of unbridled enthusiasm and some startup misconceptions.

As Director of the Founder Institute in New York one of the more common misconceptions I encounter with a lot aspiring entrepreneurs is that they are afraid of telling others their idea. There are numerous reasons though why entrepreneurs should share their startup ideas. While it is common among founders to be hesitant about divulging their startup secrets, the truth of the matter is that your company can benefit greatly from telling people what your idea is about and what you hope to achieve.

Myth #1: "I Should Save My Startup Idea Until It's Refined"
Reality: You should share your idea with everyone you meet. If you plan on pitching your idea to potential investors, why not practice beforehand? By sharing your idea with as many people as possible, you can get feedback early on to prevent wasting time on an idea that won't sell. In a Courtney Seiter-penned article titled Why No One Will Steal Your Startup Idea, Buffer CEO and Co-Founder Joel Gascoigne says:

"When you build a startup, you're basically creating something that doesn't exist already. In order to figure out if your idea is actually going to work, it's essential that you share it with people. You're going to have to do it sooner or later. The longer you leave it, the more risk there is that you spend a long time working on it, and then eventually you put it out there and find out it's not something that resonates."

Myth #2: "My Startup Idea Is Too Unique To Be Shared"
Reality: No, it's not. Just look at the countless companies that offer the same product. If you have an idea for a startup, there's a very good chance that there are a multitude of other entrepreneurs working on the exact same concept. But don't let that deter you, as you should focus less on the idea itself and more on how you plan to execute it. Here's what Cory Levy, Co-Founder at One, Inc., had to say in a Linkedin article titled Startup Secrets: Should I Hide My Business Idea?:

"Ideas are a dime a dozen; it's the execution that will set you apart from the rest. Chances are that there are people developing the same thing that you're working on now. We plan to compete not by keeping our idea secret, but by building the best possible team and by creating the best solution to the problem we are solving."

Myth #3: "People Will Steal My Startup Idea If I Tell Them What It Is"
Reality: Most likely not. The chances of someone stealing your idea are pretty slim. In fact, sharing your idea with others is a great way to drum up interest in your company and makes getting help easier. Still not convinced? Here's what serial entrepreneur Alexander Muse has to say in a Startup Muse article titled Should you share your idea?:

"If you keep your ideas a secret it will be impossible for anyone to actually help you. Could someone steal your idea? Of course, but as I've said before your potential competitors are more likely to become partners. You're far more passionate about your idea that anyone else - and most people want to partner with people with passion."

If you're still reticent about sharing your idea with others, take into account the multitude of opportunities that your company can benefit from by simply divulging what it is you do and how you're going to do it. And remember:

"If someone does take your idea, they will never have the passion you have for it because they didn't come up with it." - Joel Gascoigne